“Bitcoin DeFi” Leads the Market as ETH Tries to Break Out on ETH/BTC Chart

This week will hopefully provide more clarity for how the market will react to several near-term fac

View or listen in browser February 27, 2023 "Bitcoin DeFi" Leads the Market as ETH Tries to Break Out on ETH/BTC Chart Dear Subscriber, By Marija Matic The crypto market cap saw moderate net inflows of $6 billion today, reaching $1.12 trillion before a small correction. Market leaders Bitcoin (BTC, Tech/Adoption Grade “A-”) and especially Ethereum (ETH, Tech/Adoption Grade “B”) have both outperformed the average crypto market today. Still, I’d considered this a quiet day in the crypto world. That’s because of today’s weakness of the U.S. Dollar Index (DXY). DXY is negatively correlated to the rest of the market, hence its recent massive rally has caused BTC and stocks to turn away from their key resistance levels in a risk-off manner. Nevertheless, BTC is holding with strength. One would expect a deeper correction after 50% gains. No such thing yet. Not even after the International Monetary Fund said that banning crypto “should not be taken off the table.” On the contrary, we are currently seeing a strong performance by “Bitcoin DeFi'' projects, such as Badger DAO (+11%) and Stacks (+18%), due to rising interest in what can be built on Bitcoin after the debut of NFTs on its network. In case you missed it, you can read all about Ordinals — the new protocol that enables NFTs on the Bitcoin blockchain — here. But Bitcoin’s resilience, if DXY allows it to continue, may be soon overshadowed by Ethereum’s performance! As the ETH/BTC chart below suggests, ETH’s price is on the verge of a breakout: Click here to view full-sized image.   True, Bitcoin has had the stronger performance since mid-January, but this might change if the breakout is successful. ETH will need to break above $1,695 to kick off the real move up. And while the technical analysis looks favorable for ETH, many are wondering if the upcoming Shanghai upgrade of the Ethereum network in March will be short-term bearish for the price. The upgrade marks the moment when the Ethereum withdrawals will open up, meaning a lot of staked ETH may hit the market. However, it also means that others will be incentivized to stake for rewards since, after the upgrade, they’ll have the freedom to unstake whenever they want. The logic for both possibilities is sound, so we can only prepare and wait for now. The only part of the equation that’s clear at the moment is that there will be new demand — which will be strong, considering the high increase in the amount of staked ETH in 2023 — leading up to Shanghai. Notable News, Notes & Tweets  Sam Bankman-Fried did ‘immeasurable’ damage to the crypto industry, according to Ava Labs CEO An illegal crypto mining operation was found hidden under a high school near Boston. Liquid staking replaces DeFi lending as the second-largest crypto sector. What’s Next The ETH/BTC breakout, if it happens, will be great news for more than just our market leaders. It’ll be great for altcoins, as well! Additionally, DXY slowing down would also give crypto the space to continue running on this bullish momentum. However, all options are on the table right now with the broad market moving sideways. I look forward to gaining more clarity this week. So stick around for all our latest updates! Best, Marija Follow us:   11780 US Highway 1, Palm Beach Gardens, FL 33408-3080, USA Would you like to edit your e-mail notification preferences or unsubscribe from our mailing list? Copyright © 2023 Weiss Ratings. All rights reserved.